In terms of specialty vendors serving the cable network-technology niche — i.e. excluding broad-based Silicon Valley giant Cisco Systems — Harmonic has risen quickly to become King of Cable Tech.
San Jose, California-based Harmonic saw its Nasdaq price soar nearly 20% after it showcased for investors huge gains in its cable-network virtualization software in Q1.
Harmonic’s CableOS now controls around 10% of modems connected to cable companies’ DOCSIS 3.1 networks worldwide, about 18.4 million total.
Also read: Charter Chooses Harmonic for Key Piece of Network Virtualization Upgrade
CableOS, which both Comcast and Charter Communications have licensed in the U.S. as they overhaul their networks to next-generation “10G” standards, replaces expensive cable modem termination system (CMTS) hardware in networks with software that can run on widely available servers.
And as operators like Comcast and Charter upgrade their cable networks to the new DOCSIS 4.0 tech standard over the next three years, and with fiber-to-the-home network operators also deploying CableOS, Harmonic still has most of its runway still in front of it for its core network virtualization product.
As of now, CableOS is deployed by 94 network operators worldwide, 22% of which have signed on in the last year.
“We see ourselves still as in the very early, exciting days here,” Jeremy Rosenberg, Harmonic’s senior VP of business development, told equity analysts during Monday’s Q1 earnings conference call. (Hat tip to Seeking Alpha for the transcript.)
With CableOS’s rapid proliferation, Harmonic’s broadband segment revenue was up 23% in the first quarter to $100.4 million. Meanwhile, on the video side of the operation, advances by Harmonic's cloud-based VOS360 video software-as-a-service (SaaS) product pushed revenue up 13% in Q1 to $57.3 million.
Total company revenue in the first quarter was up nearly 7% to $157.6 million, a record.
For Harmonic, the rise has occurred, well, virtually overnight.
On April 29 of last year, the company was trading at only $8.30 a share. Jump forward to Tuesday, and its share price has nearly doubled, its market cap now approaching $1.8 billion.
That’s big, especially when you consider that CommScope, previously the cable industry’s largest specialty tech vendor, recently saw its market cap dip under $1 billion.
